Meta’s Nuclear Ambition: Powering AI Dominance with Atomic Energy

Meta US30303M1027

To fuel its artificial intelligence ambitions, Meta Platforms is making an unprecedented commitment to nuclear power. The social media and technology giant announced a series of landmark agreements on Friday, positioning itself to become one of the largest industrial purchasers of electricity in U.S. history. The strategy centers on securing a massive, reliable, and carbon-free power supply for its future data centers through a dual approach involving existing plants and next-generation reactor technology.

The cornerstone of this initiative is a 20-year power purchase agreement with utility company Vistra. This deal covers energy from three existing nuclear facilities within the PJM Interconnection grid, including plants located in Ohio and Pennsylvania. Initial power deliveries from this arrangement are scheduled to commence by the end of 2026.

Overall, the agreements grant Meta access to a capacity of up to 6.6 gigawatts by 2035. In parallel, the company is investing in future-generation small modular reactor (SMR) technology. It has established partnerships with Oklo, a company backed by OpenAI CEO Sam Altman, and TerraPower, which is supported by Bill Gates. These projects target operational status in the 2030s but face significant regulatory hurdles, as no commercial reactors of this type are currently in operation.

Market reaction highlighted the significance of the move. While Meta's own shares saw a modest increase to around $652 on Friday morning, its partners experienced more dramatic gains. Vistra's stock rose by double digits in pre-market trading, and Oklo's shares surged nearly 20 percent.

The Strategic Rationale Behind the Atomic Pivot

This strategic shift is a direct response to the colossal energy demands of AI infrastructure. Forecasts indicate that U.S. electricity demand could surge by at least 30% by 2030, driven predominantly by data center expansion.

Analysts at Bloomberg Intelligence estimate Meta could pay between $100 and $220 per megawatt-hour for nuclear power—a premium compared to the $50 to $60 range for natural gas, wind, or solar. Urvi Parekh, Meta’s Head of Global Energy, justified the decision by emphasizing the critical need for reliable baseload power. Unlike more volatile renewable sources, nuclear energy provides continuous, around-the-clock electricity, which is essential for the uninterrupted operation of AI superclusters. A lack of this guaranteed capacity could potentially stall the growth of the company's AI division.

Analysts Weigh Costs and Long-Term Vision

The financial community has largely viewed the announcement positively. Market experts at Wedbush interpreted it as a signal that major "hyperscaler" tech firms are willing to pioneer new energy sources to advance the AI revolution. The research firm Rosenblatt Securities reaffirmed its "Buy" rating on Meta, maintaining a price target of $1,117.

Concurrently, analysts are flagging the substantial investment required. Rosenblatt projects that Meta's capital expenditures (CapEx) will jump by 50% in 2026, reaching approximately $108 billion to fund its infrastructure expansion. The long-term success of this energy strategy hinges on whether the planned reactors from TerraPower and Oklo can successfully navigate regulatory approval processes and achieve grid connection in the early 2030s as intended.